Why It’s So Hard To Launch One And What Capria Is Doing About It
Starting an impact fund is HARD. New fund managers need to overcome major challenges, such as:
- Convincing investors their investment/impact thesis is credible and they possess enough practical experience to compensate for a nonexistent track record.
- Effectively managing the fund and sourcing investments in high-quality entrepreneurs.
- Having a viable exit strategy.
My partner Will Poole and I started Capria earlier this year to help first-time global impact fund managers address these challenges and bring more early-stage capital into impact investing.
My first fund, the $23 million Unitus Seed Fund, is now the leading impact seed stage investor in India. In addition to the challenges listed above, at Unitus, we are:
- Investing in a challenging market known for corruption
- Building a quality investment team and operation on a lean budget
- Restricted as a foreign capital investor to only investing with “equity”
- Raising a good portion of capital inside of India
- Trying to make money and improve the lives of millions at the same time
The support of Unitus was critical to our success. In 2000, Unitus’ founders sought to pool their resources and talents (hence, “unite us”) to help rebuild broken capital markets serving low-income populations in emerging economies such as India, Africa, Latin America and Southeast Asia. Unitus sees opportunities through the eyes of local entrepreneurs and then invests capital to build new profitable, scalable businesses with built-in community impact. Capria is the next logical step, bringing the successful Unitus model of incubating first-time impact funds to the rest of the world.
To show why Capria is valuable for new fund managers, below are the major challenges, suggestions on how to mitigate them, and how we believe we can help.